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Conference 7.286::digital

Title:The Digital way of working
Moderator:QUARK::LIONELON
Created:Fri Feb 14 1986
Last Modified:Fri Jun 06 1997
Last Successful Update:Fri Jun 06 1997
Number of topics:5321
Total number of notes:139771

2160.0. "Digital manufactures AND sells Apple computers" by TKOVZZ::SARMA (I'm a DECman) Thu Oct 15 1992 23:03

I am confused. Could someone please explain to me the strategy ? Why should
Digital sell Apple computers ?  Then, who buys DEC computers ?


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Note 3.462                       NEWS - General                       462 of 462
DEALIN::DARUWALA "Adil"                             209 lines  15-OCT-1992 14:10
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2.  APPLE COMPUTER BROADENS INTERNATIONAL PRESENCE THROUGH EXPANDED 
    MANUFACTURING AND DISTRIBUTION IN INDIA 
 
    BOMBAY, India, Oct. 15 /PRNewswire/ --In a move expected to bring 
Apple technology to millions of potential users, Apple Computer Inc. 
(NASDAQ: AAPL) today announced that it will begin locally manufacturing 
select products, as well as expand its distribution in India.  India is 
one of Apple's fastest-growing markets that comprise Apple Pacific. 
    Apple has teamed with Digital Equipment (India) Limited (DE(I)L) to 
manufacture one of its most popular desktop computers, the Macintosh 
LCII, for the Indian marketplace.  DE(I)L is a joint venture between 
Digital Equipment Corp. and Hinditron, a leading conglomerate 
of companies in India.  DE(I)L will also provide distribution for 
Apple Computer in India, significantly broadening Apple's market 
coverage in that country. The agreement with DE(I)L complements an 
existing distributor agreement that Apple holds with Raba Contel Pvt 
Limited. 
    "Since its inception in 1988, Apple Pacific has aggressively pursued 
new markets that afford the type of potential India is currently 
providing," said John Floisand, president of Apple Pacific.  "India 
offers a significant growth opportunity for Apple Far East, by giving 
us access to the world's largest university-educated population, as 
well as a newly liberalized economic environment." 
    "The possibilities presented by the Indian market are tremendous," 
said William James, managing director, Apple Far East.  "By 
distributing through DE(I)L and Raba Contel's network, we will be 
able to give many more Indian consumers a chance to try a Macintosh 
and experience its trademark ease-of-use." 
    As part of its international expansion strategy, Apple plans to 
increase emphasis on software development by tapping into India's 
vast resources of programming expertise.  As a result, Apple expects 
to produce a new generation of third-party products and customized 
solutions not only for users in India, but for consumers in other 
parts of the world as well.  Currently, Apple is working with 
10 local software developers and exploring opportunities with additional 
companies in the areas of software and support. 
    As Apple's fastest growing region, Apple Pacific does business in 
more than 87 countries.  Subsidiary offices are located in Toronto; 
Sydney, Australia; Tokyo; Hong Kong; Taipei, Taiwan; and Singapore. 
    NOTE:  Apple, the Apple logo and Macintosh LCII are registered 
trademarks of Apple Computer Inc. 
    -0-                           10/15/92 
    /CONTACT:  Nancy Keith Kelly of Apple Computer, 408-974-2133; or 
Whitney Greer of Regis McKenna, 415-354-4422, for Apple Computer/ 
CO:  Apple Computer Inc.; Apple Pacific; Digital Equipment (India) Ltd; 
     Digital Equipment Corp.; Hinditron; Raba Contel Pvt Ltd. 
ST:  California 
IN:  CPR 
SU: 
 
TM  
-- SJ001 -- 
6333 10/15/92 08:33 EDT 
 
:TICKER: AAPL 
Copyright (c) 1992 PR Newswire
Received by NewsEDGE/LAN: 10/15/92 8:34

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2160.1PEEVAX::QUODLINGOLIVER is the Solution!Fri Oct 16 1992 00:1112
    Why should we make Apple systems? Because they pay us money to do so.
    We wouldn't be in it, if it weren't worth it.
    
    Why do we sell Apple systems. Just a Wild Guess, but I would think that
    India and surrounding areas, being basically the "third" world, would
    tend to skew towards the lower end of the product range, than
    elsewhere. This means that people there can afford less, and so make do
    with a smaller machine. It also means that people there, tend to write
    "tighter" code, but that's another rat hole...
    
    q
    
2160.2still confused @!#$@!TKOVZZ::SARMAI'm a DECmanFri Oct 16 1992 02:374
    Doesn't it mean that we are giving up an opportunity to have a wider
    installed base ? It is an infant market. So, it is all the more
    important to make our presence felt. I do agree that there must be
    'some' strategy behind this. But I fail to catch the catch.
2160.3POCUS::OHARAI'm rowing as fast as I canFri Oct 16 1992 10:578
We need to be able to sell, at a profit, anything a customer wants.  It's
up to the account team to determine what's the best fit.  I do hope, though,
that we'd all try to sell our own products first.

My own customer wants to buy all his desktops, both Intel PC's and Apples,
directly fron Digital.  So I look forward to this Apple arrangement in the US.

Bob
2160.4Local AccessDNEAST::DUPUIS_STEVEABC, it's easy as 1-2-3Fri Oct 16 1992 11:2112
     India is a country that has strict laws and/or tariffs on the 
    import of computers into that country for sale within India.  In
    order to gain a large market share there you must build locally
    for consumption in the host country.  I have not seen anything 
    that says these units will be exported from India to the U.S. although
    this is a possibility.  
    
    The process, where Digital Manufacturing, building product for external 
    customers like Apple, helps to keep our manufacturing operations 
    competitive.  We do this in the U.S. and elsewhere within Digital.
    
    	Steve D
2160.5There is a differenceTPSYS::SHAHAmitabh Shah - Just say NO to decaf.Fri Oct 16 1992 12:0710
	The title of this string is misleading: it is not Digital that
	will manufacture and sell Apple computers, but it DEIL which will
	do that. Note that DEIL is a separate company from Digital.
	Digital has a stake in DEIL, but not a controlling one (if I recall,
	DEIL was started with a 40% equity participation from Digital, and
	60% from Hinditron; it has since gone public in India). 

	That said, I think this is simply one of the ways in which Digital
	and Apple are cooperating in other markets (wasn't there an
	announcement about this a year or so ago?).
2160.6If we build them, then they're "DEC machines", aren't they?TLE::TOKLAS::FELDMANOpportunities are our FutureFri Oct 16 1992 12:1415
I don't understand the logic in .0 and .2.  What makes you believe that 
just because someone buys a Macintosh, they won't buy other DEC equipment? 
Or that if we didn't manufacture the machines under contract to Apple, then 
no one would, and therefore they'd be forced to buy from DEC.

For the most part, we can't compete with what Macintoshes have to offer.  
Even when we can (a chunk of the desktop market), it's a difficult sell.  
It isn't the hardware that distinguishes the Mac vs. PC competition; it's 
the software.  

This way, we get the profits on the manufacturing part (the part we know 
how to do), while Apple gets to advertise the machines we build (that's 
something they're good at).

   Gary
2160.7BAYDEC::GOETZEA natural mystic is blowing through the air...Fri Oct 16 1992 21:538
    The answer to .0 can be found in answering the question, "Why do we
    make and sell DOS PC's?" We didn't invent them, we didn't set the market
    standards, we didn't make them popular, but we got in that market
    to stay competitive in the computer industry, and to help sell our
    other products (PATHWORKS) which adds value to the commodity boxes,
    I guess.
    
    	erik
2160.8TKOVZZ::SARMAI'm a DECmanMon Oct 19 1992 02:144
    I THINK, it does make sense.
    
    Regarding DE(I)L and DEC - I see no difference. After all DE(I)L is
    affiliated to DEC and shares the same values and objectives. 
2160.9Manufacturing is a productCARAFE::GOLDSTEINGlobal Village IdiotMon Oct 19 1992 20:0511
    This is not the only instance of Digital's manufacturing plants
    building parts for other companies.
    
    It's business.  We have good plants.  Other companies have customers,
    something we could use a few more of :-( .  So we allow our
    manufacturing expertise (and it's real) to be sold for profit.  Either
    we do it or somebody else does.
    
    This is the real world of grown-ups.  We don't reserve our favors for
    our friends.  We don't do favors.  We do business.  Apple's a good
    customer!
2160.10The real money is in the ServiceMIMS::BAINE_KThu Oct 22 1992 12:2314
    For every Apple DEC can sell to one of its customers, DEC sells a
    service contract.  With PC profit margins barely at 2% these days, the
    service contracts are the much more lucrative piece of the business. 
    Also, once an account manager has a presence on the desktop, he or she
    can more easily find out where other business is where there might be
    sales of DEC equipment.  Many customers have standardized on Macs, and
    they wouldn't buy DEC equipment  and have to retrain their people for
    the best deal in the world.  People who use MACs tend to love them and
    wouldn't part with them.  Also, except for the new Tiger PCs, Digital's
    PCs have been so expensive, that when reps tried to sell them, they
    were literally laughed at by customers.
    
    KB